Fully Insured Plans

"Fully Insured" is what most people mean by "insurance".  The individual,  and or his employer, pays a premium to the insurance premium to the insurance carrier, in return, the insurance carrier is responsible for paying future medical claims.  These plans will include  Individual or family deductible, annual maximum out of pocket  and the individual share of coinsurance percentage such as 80/20.

Financial risk for future medical claims is almost entirely  the  responsibility of Insurance Carrier. That insurance company is contracted to pay all claims and not charge any more premiums during the term of the contract ( typically one year).

Insurance companies must obey simple math (Actuarial calculations)  in order to function, therefore, if cost of medical services increase, the insurance carriers must offer premium rate increases at the beginning of the next contract period.  Employers are free to accept those premium increases or shop around for new insurance carriers. 

The idea of "pooling" has always been a part of fully insured coverage as well. In simple terms it refers to the spreading of financial risks evenly among large number of contributors within that group. Small group coverage for a 22 year old is usually much less expensive that that for a 62 year old but a  sick 62 year old would pay the same  deductible and out of pocket maximums as a healthy 62 year old individual.

Some Insurance carriers offer the  benefits of community rating,  which means that individuals and companies with large numbers of health conditions can find insurance coverage which is not priced completely out of their price range.  

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